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The increasingly nasty fight between South Carolina Gov. Mark Sanford and Lt. Gov. Andre Bauer escalated further this week with charges from a legislative ally of Bauer that Sanford and his supporters are spreading malicious rumors that Bauer — a Republican like Sanford — is gay.

GOP state Sen. Jake Knotts made the charge in a letter to state legislators Wednesday that was obtained by POLITICO. In an interview in June with The State newspaper, Bauer voluntarily brought up the subject of his sexual orientation. Asked if he was gay, he responded: “One word, two letters. No.”

But the rumor has continued to circulate widely on the Web and has become caught up in the continuing drama surrounding Sanford, whose adulterous affair with an Argentine women has led to calls for his resignation. Bauer, who would succeed Sanford if he left office, called for Sanford to resign last week.

Sanford communications director Ben Fox rejected Knotts’s charges. “This letter is simply wrong and in that regard, as bizarre as many of the other claims and attacks of recent weeks, “ he said in a statement to POLITICO. “Some have even argued this indeed points to an obsession with slandering anyone who tries to change the ‘good ol’ boy’ system of politics in Columbia.”

“South Carolina is facing serious challenges, and the Governor is dedicated to addressing these challenges alongside other members of the Legislature committed to the same. We have a state capital with too much spending, too little transparency, and as shown by this letter, at times too many political attacks.”

Bauer could not be reached for comment.

In his letter, Knotts charged Sanford and his allies of having “stooped to a new low” in orchestrating a “false character assassination” against Bauer.

“The timing of this smear campaign is obviously not a coincidence. Last week, Lt. Governor Andre Bauer called on Governor Mark Sanford to resign, and last weekend, the House Republican Caucus decided almost unanimously to move forward to ask Governor Sanford resign from office, under threat of impeachment,” Knotts, who is a close ally of Bauer, wrote in the letter.

“This attack was orchestrated on behalf of Mark Sanford, either directly or indirectly, and financially subsidized by him or one of his many ‘front-groups,’” he wrote.

Knotts, a vocal and longtime critic of the governor, accused Sanford’s circle with having made a similar attack against him in the past, and warned state lawmakers that they too could find themselves trying to quell politically damaging information coming discreetly from the governor’s office.

“We cannot allow this type of groundless, baseless, Internet slander against public officials to continue to exist in our state,” he wrote. “The legislature now has the opportunity to look into ending it once and for all. If we don’t you and your family could be the next target.”

Even among Republicans, the majority of South Carolina politicians have called for Sanford’s resignation.

Additionally, numerous sources throughout the state say that both the state House and Senate may now have the numbers call in a special session to impeach the governor. State Republican leadership, however, is holding its members back from making the move until the results of a state ethics probe into the governor’s use of state aircraft is completed.

Knotts wrote in his letter to lawmakers that Sanford has given them “plenty of solid reasons to remove” him and argued that the alleged attack against Bauer offers “one more” reason to impeach the governor.

“As one of Andre’s closest friends having known him since he was eight years old, I am 100 percent certain the rumor is false,” he wrote. “There are numerous other witnesses who will attest the rumor is without any merit whatsoever.”

Another Republican legislator, state Sen. Larry Martin confirmed to POLITICO that Knotts has been e-mailing the letter to members of the state House and Senate, and said that many state lawmakers think Knotts is “accurate in his suspicion of the governor.”

“Everyone I’ve talked to thinks there is some connection to the governor, just because of the timing of it, but it is very hard to prove,” Martin said. “Unless you’ve got proof, everyone can have their suspicions, but I certainly wouldn’t accuse the governor of that.”